Plus, changes to Evergreen's lineup, Davis' bargain-hunting, and more.
Kelly Morgan is no longer part of Putnam Research's PNRAX management team. Morgan and recently departed Josh Brooks were first tapped to take a more active role here in 2005 as part of a plan to overhaul the struggling large-blend fund. During the duo's tenure, however, the fund has failed to keep up with its benchmark, the S&P 500 Index. In fact, 2007 is turning out to be one of the worst showings thus far: Thanks to a few sour bets in financials (including Countrywide Financial CFC and Bear Stearns BSC), the fund is on track to finish the year approximately 5 percentage points behind its benchmark, keeping itself in the category's basement. Charles Dane and Walter Scully remain comanagers of the fund.
This latest development at Putnam is much more significant since Morgan also relinquished her role as the director of research. Putnam is now seeking to fill her role and Brooks' role as head of large-cap equities. Morgan remains the head of large-growth equities and one of the lead managers of Putnam Voyager PVOYX.
Evergreen Launches New Funds, Merges Old Ones
Evergreen Investments recently added three new diversified equity funds to its lineup. Evergreen Golden Large Cap Core, Evergreen Golden Mid Cap Core, and Evergreen Golden Core Opportunities (a small- to mid-cap offering) will be subadvised by Golden Capital Management, a minority-owned affiliate of Evergreen. Similar to the Golden's separate account strategies, management will combine fundamental with quantitative analysis. The funds' annual levies range from 1.30% to 1.55% for A shares, which are comparable to their respective category norms.
Evergreen is also seeking shareholder approval to roll eight of its single-state muni-bond funds into Evergreen Municipal Bond EKEAX. These eight funds are Evergreen Alabama Municipal Bond EALAX, Evergreen Connecticut Municipal Bond ECTAX, Evergreen Georgia Municipal Bond EGAAX, Evergreen Maryland Municipal Bond EMDAX, Evergreen New Jersey Municipal Bond ENJAX, Evergreen New York Municipal Bond EOYAX, Evergreen South Carolina Municipal Bond EGASX, and Evergreen Virginia Municipal Bond EGVRX. Pending shareholder approval, the proposed merger will take place in April 2008.
Davis Managers Bargain-Hunt in Financials
Davis Selected Advisors has upped its stake in two companies whose shares suffered greatly in the recent financial-market downturn. Davis' recent filings with the Securities and Exchange Commissions indicate that it holds 6.4 million shares (or 5.1%) of bond-issuer MBIA MBI (as compared with 481,021 shares as of Sept. 30, 2007). This news comes at the heels of Merrill Lynch's MER announcement that Davis will purchase $1.2 billion of its common stock. As a result of these transactions, Davis will become one of the largest institutional investors for both companies.
Vanguard's Mega-Cap Index Funds Open for Business
Vanguard Mega Cap 300, Vanguard Mega Cap 300 Value, and Vanguard Mega Cap 300 Growth VMGAX are now accepting new investors. These funds track the performance of MSCI U.S. Large Cap indexes. Keeping to the firm's low-cost tradition, these come with a rock-bottom expense ratio of 0.08% for the Institutional Shares, which requires a minimum investment of $5 million. For those with smaller investments in mind, the firm also launched ETF shares of the new funds: Vanguard Mega Cap 300 ETF MGC; Vanguard Mega Cap 300 Value ETF; and Vanguard Mega Cap 300 Growth ETF. These come with a target expense ratio of 0.17%.PAGEBREAK
Aston Changes Subadvisor for Two Funds
Aston Funds will replace ABN AMRO Asset Management with Montag & Caldwell as the subadvisor of Aston/ABN AMRO Growth CHTIX and Aston/ABN AMRO Balanced CHTAX, effective Jan. 1, 2008. Both ABN AMRO funds have been languishing lately. Their returns have landed in the bottom quartile of their respective categories for the past four calendar years, and they're on track to a poor showing in 2007 as well. Montag & Caldwell now subadvises five Aston funds. It's uncertain at this point if Aston will merge these two offerings into Aston/Montag & Caldwell Growth MCGFX, a large-growth Analyst Pick, and Aston/Montag & Caldwell Balanced MOBAX.
Managers Funds to Introduce New Fee Caps
Effective Jan. 1, 2008, Managers Funds will cap the expense ratios of Managers International Equity MGITX, Managers Emerging Markets Equity MEMEX, and Managers Global Bond MGGBX at 1.48%, 1.77%, and 1.10%, respectively. Despite these new fee limitations, the funds' annual levies will still be expensive relative to their category peers'.